In the first installment of this post, we discussed overcoming a prospect's objections and selling them on your business; now it's time to move on to contract negotiations. This is the time to hash out the specific terms of the agreement. The discussion can take hours or months depending on the scope of the sale. Ultimately, the end result will determine the profitability of the sale.
At Armstrong, we treat our agents as valued customers. Signing a new agent is how we ‘close the sale.’ Recognizing that freight agents can take their business anywhere, contract negotiations are the beginning of what we hope to be mutually beneficial long-term relationships. In this blog post, I'll cover tips on how to negotiate agreements that maximize gains for both parties.Come Prepared
Have a timeline with goals and milestones established in advance. Don't rush the process to meet these deadlines, but don’t lose sight of your plan. It’s important to understand your motivations and what you want to accomplish in the exchange. Avoid the 'negotiating to win' mentality and dive deeper into what value this person will bring you. What are you really after? How can this relationship benefit both parties? Working creatively and collaboratively with your prospect will allow you to reach an agreement that satisfies each side.
Before negotiating with your prospect, it's important to understand your wants versus your needs. Are there items you are willing to concede? Come prepared with alternatives or compromises that are acceptable to you and may be more attractive to your prospect. Most importantly, know your non-negotiables and stick to them.
Know Your Prospect
Spend time researching your prospect. Knowing the details of how their business operates can help you tailor your pitch to their needs. Do they have a unique product or service? What are their challenges and motivators? What are their short- and long-term business strategies (expansion, relocation, new technologies)? How are they dealing with competitive pressures, market trends, and the general business environment?
Beyond knowing your prospect's competitive landscape, it helps to understand their larger industry and market trends. No negotiation happens in a vacuum. What are your competitors offering? What's the average price for your product or service, and how does your offer compare? What do current market demand and tendencies look like? Knowing the context of your negotiation will give you a better idea of what you can offer and help you form your negotiation strategy.
Quarterback the Process
As a salesperson or recruiter, it's your job to drive the negotiation. Lead the conversation from the beginning – determine the negotiation location, timing, topics, and pace. Guiding the sales process helps you maintain control throughout the interaction. The party that frames the interaction typically has greater command over how issues are ultimately resolved.
Focus on Facts, Not Feelings
The best negotiators remove emotion from the situation. They are able to separate business from personal feelings. Stay positive, find points of agreement, and set the tone for a successful negotiation for both parties. Remain polite and professional throughout the negotiation, and give the prospect your undivided attention. Ask probing questions to better understand their perspective and goals. Maintain your confidence throughout the interaction by avoiding 'I think,' 'I feel,' or 'I believe' statements that can dilute your points.
Take Your Time
Although it's tempting to complete the negotiation as soon as possible, the final product of rushed negotiations is generally poor. Slow down, discuss each item in the document, and avoid making hasty decisions. Breaking down the agreement into chunks and tackling one section at a time keeps the process moving. If contract negotiation is a war, conceding on small items would be the battle.
Start the process by addressing the aspects you agree on or are willing to concede on. This will provide momentum and establish positive morale. By the time you are tackling more difficult issues, you will both be invested in the agreement. At this point, you will be less likely to abandon the negotiation.
Keep the Negotiation Simple and Flexible
The first draft of your contract will likely be just that – a draft. Consider the first review of the agreement a starting point and prepare for edits and adjustments. Keep the initial terms simple and clear, avoiding the more nuanced language that can bog down an agreement. Stay flexible throughout your negotiations. Discussing issues directly by phone or video call, rather than going back and forth in email or text, will help clarify pain points and speed up the process. Be prepared to adapt your negotiation strategy based on how things are progressing.
Partner With Us!
When it comes to negotiations, it's easy to get lost in the numbers. If you're an independent agent owner faced with an astronomically good deal, be sure to read the fine print. Do you have to pay for your load boards? Will you have to pay a debt retention percentage out of your commission? How will your brokerage partner handle claims – will they split them with you, not cover certain types of freight, or make you pay all of it?
At Armstrong, we’re proud to offer a transparent agent program with a second-to-none commission split and benefits. There are numerous perks and opportunities for our top-performing agents that recur year after year, including reward trips, an annual conference, and specialized back-office support exclusively for elite agents.
Contact the Agent Recruiting team today to see if you qualify for our program, or browse our website for more information.
